OFAC
OFACAlso called office of Foreign Assets Control
OFAC, the Office of Foreign Assets Control, is the US Treasury office that administers and enforces US economic and trade sanctions. It publishes the Specially Designated Nationals (SDN) list, issues licences and guidance, and imposes civil penalties. US persons must block property of listed parties and generally cannot deal with them.
How it works
OFAC acts under presidential executive orders and statutes such as the International Emergency Economic Powers Act. It designates people, companies, vessels and countries, adds them to its lists and publishes general and specific licences that permit some dealings. Banks screen customers and payments against OFAC lists, block matching property, reject prohibited transactions and report both to OFAC within 10 business days.
US sanctions apply strict civil liability, so a firm can be penalised without knowing it broke the rules. Dollar payments, US branches and US staff bring many non-US firms into scope. Since 2024 the statute of limitations for sanctions violations is 10 years, and OFAC record-keeping rules now match. OFAC's 2019 framework sets out the compliance programme it expects.
The rules
Lets the President block property and bar transactions in a declared national emergency, the basis for most OFAC programmes.
US persons and transactions within US jurisdictionExtends the statute of limitations for civil and criminal sanctions violations from five to 10 years.
Violations of IEEPA and the Trading with the Enemy ActRequires transaction and blocked property records to be kept for at least 10 years.
Persons engaging in transactions subject to OFAC rulesSets out five components OFAC expects in a sanctions compliance programme, starting with management commitment and risk assessment.
Organisations subject to US jurisdictionCommon questions
Does OFAC apply to non-US firms?
OFAC rules bind US persons, including US branches of foreign banks. Non-US firms are caught when they use US dollars cleared through US banks, US staff or US goods, and some programmes add secondary sanctions.
What is the SDN list?
The Specially Designated Nationals and Blocked Persons List is OFAC's main sanctions list. US persons must block property of listed parties. Entities 50% or more owned by listed persons are also blocked.
Can OFAC fine a firm that did not know it breached sanctions?
Yes. Civil liability for US sanctions breaches is strict. OFAC weighs knowledge, the compliance programme, cooperation and voluntary self-disclosure when setting the penalty amount under its enforcement guidelines.
